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Weekly UpdatesBeerepoot and Sunikka (2005) judge the EC energy certificate to be essentially a communicative instrument that addresses information problems. Combining it with regulations or economic incentives will improve its effectiveness. Consequently, energy performance standards for existing dwellings may well become obligatory in due time, just as energy performance standards have become obligatory for new construction in many European countries.
The implementation of the EPBD entails opportunities for professional landlords. Firstly, they will gain a detailed insight in the energy performance of their housing stock, because they have to provide an energy certificate at turnover. This gives opportunities to integrate energy labelling in their strategic asset management as a basis for analysis and evaluation and the formulation of targets.
A second opportunity of the EPBD for professional landlords relates to the communicational value of the EPBD energy label. A professional landlord can employ the energy label as a basis for its communication with its stakeholders and tenants about energy conservation measures and energy performance. Especially the tenants play an important role in the appraisal of the EPBD energy labelling system. Therefore, the communication with tenants about energy performance should foremost be based on comfort, health, indoor climate and living expenses, because these aspects appeal to tenants more than the concept energy performance.
In addition, if energy performance standards for existing dwellings become obligatory as they are for new construction, professional landlords will have no choice but to take up energy as an integral part of their asset management.
4. STRATEGIC ASSET MANAGEMENT
Professional landlords have to take decisions about the development of their housing stock in order to avoid voids, to keep their housing stock in line with the present and future tenants' demands and to keep their stock in a proper physical state. The importance of the development of policies and strategies supporting these decisions has grown considerably in many Western countries in the last 10 to 20 years, mainly due to the rise of neoliberalism and, in connection with that, diminished financial support from the government. This shift can particularly be observed in the social rented sector, which traditionally has been very government-dominated in most European countries. These developments have led to a more market oriented social housing management (Gruis and Nieboer, 2004).
Although strategic asset management in social housing is not restricted to Dutch housing associations only, the concept is in great length employed by the Dutch housing associations. This is to a large extent due to the characteristics and tasks of Dutch housing associations. When set within an international context, social rented housing in the Netherlands can be characterised by its relatively large share of the housing stock, a strong orientation on the market, a relatively large proportion of dwellings for middle-income households and, more or less as a consequence, a large variety of tenants in socio-economic respect (Van Kempen and Priemus, 2002; Priemus, 2003). With an asset of roughly one third of the total housing stock, Dutch housing associations own a considerable part of the total housing stock. They are not-for-profit organisations, which are obliged to operate in the interest of housing, in particular by providing decent, affordable housing to lower-income households.
During the last 10 years, Dutch housing associations were transformed from operational, task-oriented organisations into 'social entrepreneurs' and had to operate in a more strategic, market oriented way. As a result, the sector is, more than in the past, responsive to innovations to support management decisions. This might create a favourable climate for the development of strategies on relatively new issues. Energy-efficient asset management can be seen as one of these.
The models for the development of asset management strategies are based on those for commercial companies. The core objectives of a commercial enterprise generally differ considerably from those of a housing association or another non-profit organisation, because of the relative importance of making profit. Nevertheless, the model from the commercial sector can be very useful for non-commercial landlords. An example of such a model is Kotler's (1997) general model for strategic business planning (see Figure 1).
More or less similar to this model is the strategic asset management model of Van den Broeke (1998), particularly developed for the social housing sector. Since van den Broeke has published his model, several variants have been produced (e.g. Nieboer et al., 2001) among others the one in Figure 2.
The model starts with the formulation of the mission and general objectives (mainly on the portfolio level) of the organisation. Based on these objectives and an analysis of internal and external factors, more specific targets and strategies (mainly on the housing estate level) are formulated. After this, a check or appraisal of the proposed strategies takes place. The assigned strategies are elaborated in estate management plans, after which the implementation takes place.
The formulation of strategies is an important aspect of the strategic asset management process. To define distinct strategy alternatives, the use of 'labels' has proven in our advisory practice at housing associations to be a very efficient way to allocate investments in the housing stock. Two types of labels can be distinguished, whereby each type refers to either 1) measures or activities (indicating what has to be done) or 2) the desired quality or performance level (indicating what has to be achieved). The use of labels can provide housing associations with a clear and convenient grouping of measures and activities and/or quality and performance levels.
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In general, labels are formulated per housing estate, although in some cases it might be necessary to define and employ labels on the level of individual dwellings, on neighbourhood level or the level of market segments (product-market combinations). An interesting discussion with regard to energy conservation is on what level of the housing stock the improvement of the energy performance should be performed. On the one hand, a professional landlord can choose to suit the wishes of its individual tenants, resulting in an increased willingness to collaborate but also in a variety of measures, on the other the housing association can choose to renovate on housing estate-level in order to decrease costs and simplify construction processes (Straub and Vijverberg, 2004).
Labels must refer to topics that are considered as relevant and important for the housing stock. Examples of these domains with examples of labels and actual measures are listed in the Table 3.
The level of detail of the labels can vary. It is important to choose the right level of abstraction. On the one hand, labels are meaningless when they are very general, while on the other hand, very detailed labels make stock policy inflexible. In practice, most labels are rather general in the first stages of policy development, and will be elaborated in the implementation phase. Examples of rather general labels are maintain, refurbishment, sale and demolition. More detailed labels can be made by defining items as specific maintenance and rent levels.
As we have seen, two types of labels can be distinguished. Labels according to the first type (measures or activities) that refer to energy conservation indicate the measures that must be taken to achieve a certain energy performance. Labels of the second type, addressing the desired quality or performance level, are especially interesting in the context of this paper, because they refer to the use of energy labels according to the EPBD as well as to aspects resulting from energy conservation measures.
The labels related to energy performance can be defined in strict accordance with European or national regulations (for instance performance level A, B, C, D etc.). Labels for convenience and luxury are appropriate examples concerning the aspects resulting from energy conservation measures. In this approach, not the energy performance itself (i.e. EPBD energy label) but related aspects like comfort level, security, health and indoor climate could find a place. For example, the placement of HR++ glazing improves the energy performance but also increases the comfort level and the security level of the dwelling, just as the replacement of an open heater by a high efficiency boiler will improve the energy performance but also improves the indoor climate and the health level of the dwelling.
5. INTEGRATION IN STRATEGIC ASSET MANAGEMENT
The strategy, on which the measures that eventually will be implemented are based, is developed in the consecutive steps of the strategic asset management process. In each step, specific information is required and drawn into the decision-making. Labels are employed in the central process-steps where the strategy options per housing estate are determined and its consequences are weighed. When we follow the steps of the strategic asset management process, the following information and considerations could be involved.
* Mission and objectives
In this first step, the framework for the deployment and implementation of energy conservation measures in relation to strategic asset management is drawn. The professional landlord determines its position towards energy conservation or, in a wider perspective, to sustainable building and sustainable management. A stakeholder analysis could be beneficial to formulate a mission statement, of which the environmental aspirations are part. In this analysis, internal key departments such as strategy, maintenance/project development, communication and finances as well as external stakeholders such as tenants, the local community and regional collaboration forms can be consulted.
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